The most common definition that monetary policymakers use for price stability is
A) low and stable deflation.
B) an inflation rate of zero percent.
C) high and stable inflation.
D) low and stable inflation.
D
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The most important determinant of the price elasticity of demand for a good is
A) the share of the good in the consumer's budget. B) whether the good is a necessity or a luxury. C) the definition of the market for a good. D) the availability of substitutes for the good.
The World Bank is an international organization that
A) promotes the growth of trade by setting rules for how tariffs and quotas are set by countries. B) makes loans to countries to finance projects such as dams and roads. C) makes loans to countries with balance of payment difficulties. D) helps developing countries that have been having difficulties in repaying their loans to come to terms with lenders in the West.
Which economic policy would a government adopt in order to maximize net social welfare?
a. Increasing taxes on commodities with a relatively low elasticity of supply b. Increasing subsidies on commodities with a relatively high elasticity of demand c. Reducing subsidies on commodities with a relatively low elasticity of demand d. Reducing taxes on commodities with a relatively high elasticity of supply
The agency directly responsible for monetary policy in the United States is
A. the twelve Federal Reserve Banks. B. the Board of Governors of the Federal Reserve System. C. the Congress of the United States. D. the United States Treasury.